Government spending doesn’t compete with private investment — it actually promotes business spending. Central bankers, who normally cultivate an image as stern inflation-fighters, need to do the exact opposite, convincing markets and investors that they will push inflation up. “Structural reform,” which usually means making it easier to cut wages, is more likely to destroy jobs than create them.

Still, Very Serious People insisted otherwise, claiming that the most urgent threat confronting the country was the federal budget deficit, demanding sharp cuts in interest rates lest hyperinflation begin at any moment, and championing a belt-tightening austerity regime. As Krugman points out, some policymakers — including at the European Central Bank — heeded this disastrous advice, and the continent hasn’t recovered since.

And don’t be fooled by indicators that suggest the global economy is — if not out of the woods — slowly emerging, Krugman cautions:

It’s true that with the U.S. unemployment rate dropping, most analysts expect the Fed to raise interest rates sometime next year. But inflation is low, wages are weak, and the Fed seems to realize that raising rates too soon would be disastrous. Meanwhile, Europe looks further than ever from economic liftoff, while Japan is still struggling to escape from deflation. Oh, and China, which is starting to remind some of us of Japan in the late 1980s, could join the rock-bottom club sooner than you think.

So the counterintuitive realities of economic policy at the zero lower bound are likely to remain relevant for a long time to come, which makes it crucial that influential people understand those realities. Unfortunately, too many still don’t; one of the most striking aspects of economic debate in recent years has been the extent to which those whose economic doctrines have failed the reality test refuse to admit error, let alone learn from it. The intellectual leaders of the new majority in Congress still insist that we’re living in an Ayn Rand novel; German officials still insist that the problem is that debtors haven’t suffered enough.

The first thing to say about Naomi’s Klein’s latest book is that its title makes a grand promise, This Changes Everything – and that’s before you even get to the subtitle, which sets up a face-off between capitalism on one side and the climate on the other. The second thing to say is that no single book could ever meet such a promise. Klein, with careful aplomb, does not attempt to do so. Rather, she offers a tour of the horizon upon which we will meet our fates. Or, rather, the horizon upon which we will attempt to change them.

In the face of such huge topics, Klein’s strategy is a practical one. She defers the problem of capitalism-in-itself (as German philosophers used to call it) and focuses instead on our era’s particular type of capitalism – the neoliberal capitalism of boundless privatization and deregulation, of markets-über-alles ideology and oligarchic billionaires. Her central argument is not (as some have insisted) that capitalism has to go before we can begin to save ourselves, but rather that we’re going to have to get past neoliberalism if we want to face the greater challenges. Klein writes:

Some say there is no time for this transformation; the crisis is too pressing and the clock is ticking. I agree that it would be reckless to claim that the only solution to this crisis is to revolutionize our economy and revamp our worldview from the bottom up – and anything short of that is not worth doing. There are all kinds of measures that would lower emissions substantively that could and should be done right now. But we aren’t taking those measures, are we?

At the outset Klein asks the obvious question: Why haven’t we, in the face of existential danger, mobilized to lower emissions? There are lots of reasons, but one stands above all others. We have not mobilized because “market fundamentalism has, from the very first moments, systematically sabotaged our collective response to climate change, a threat that came knocking just as this ideology was reaching its zenith.” In other words the climate crisis came with spectacularly “bad timing.” The severity of the danger became clear at the very time when “there-is-no-alternative” capitalism was rising to ideological triumph, foreclosing the exact remedies (long-term planning, stricter government regulation, collective action) that could address the crisis. It’s a crucial insight, and it alone justifies the price of admission.

Klein reports that her “environmentalist friends” constantly ask her, “Do you have to say ‘capitalism’?” It’s a great laugh line, but it’s important to acknowledge that the question is a fair one. Because if capitalism – the hard core of our woe-begotten economy – is the problem, then our near-impossible task becomes even more difficult. Given her animus against neoliberalism (see her previous bestsellers, No Logo and The Shock Doctrine), you might expect her to agree that vocal anti-capitalism is unnecessary; neoliberalism is quite enough to fear all by itself. But Klein is playing another game, and it requires her to call things by their proper names. In this sense she may not even be an environmentalist, at least not in the old sense of the word. The modern American green movement has so long strained to avoid charges of anti-capitalism that you could write its history in terms of this avoidance. Such a history would recount endless screeds against “industrialism,” “technology,” “reductionism,” “patriarchy,” “overpopulation,” and, lately, even agriculture. All of these, no doubt, have something to teach us, but absent a coherent understanding of political economy, they shade together into noise and confusion.